The Israeli container company Zim believes that a return to the Suez Canal and the Red Sea in the near future is increasingly likely.
Responding to analysts’ questions during the company’s Q3 2025 earnings about the likelihood of a return to the Red Sea and increasing market share in Asia-Europe trade, Zim’s President and CEO Eli Glickman said, “The answer is yes. In fact, we expect the insurance company to approve our return to the Red Sea, the Suez Canal, and Bab el-Mandeb, and we eagerly anticipate switching from the Cape of Good Hope to the shorter trade route as soon as possible.”
Zim was one of the first lines to reroute via the Cape of Good Hope after the Houthis began attacking Israel-linked ships in the Red Sea in November 2023 in response to the war between Israel and Hamas in Gaza.
At the beginning of the call, Glickman said that the current ceasefire in Gaza was an encouraging development, but that more assurance was needed regarding its permanence, which the company is closely monitoring. Glickman stated, “However, we believe a return to the Suez Canal in the near future is becoming increasingly likely.”
Glickman also noted that, from a commercial perspective, a return to the Suez Canal offers opportunities to increase fleet efficiency and achieve cost savings, but it also carries the risk of increasing fleet supply and putting further pressure on freight rates.
This additional capacity is emerging at a time when the container shipping industry is already facing an orderbook equivalent to 31% of the existing fleet. Zim’s Executive Vice President and CFO, Xavier Destriau,
stated that while deliveries are expected to slow down in 2026 compared to this year, over 3 million TEU of new capacity is expected to be delivered in 2027, which would overshadow the record year of 2024.
Destriau said, “In 2026, the supply-demand imbalance will worsen with the industry’s return to the Suez Canal, which will significantly increase effective capacity after a period of adjustment.”
The container line is returning chartered tonnage as charters come up for renewal. Destriau said that, based on the company’s cautious outlook, it has returned 22 chartered vessels so far this year. The line has three vessels, or 5,600 TEU of capacity, due for renewal this year, and 17 vessels totaling 55,000 TEU of capacity requiring charter renewal in 2026.
Destriau said, “This option to retain the capacity we return to owners allows them to adjust their capacity according to changing market conditions or changes in our commercial strategy.”
Zim reported a net profit of $123 million in the third quarter of 2025. In the same period the previous year, this figure was $1.13 billion. Revenue in Q3 2025 was $1.78 billion, a 36% decrease. This decline was almost exactly in line with the 35% drop in average revenue per TEU, which fell to $1,602.
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